Management Update

An executive summary of industry news

By Staff -- Logistics Management, 5/1/2005

• Customs has finally proposed a concrete benefit for C-TPAT members. Importers had been clamoring for specific information about the benefits of participating in the Customs-Trade Partnership Against Terrorism program. In response to those requests, U.S. Customs and Border Protection Commissioner Robert C. Bonner told C-TPAT members last month that their companies would not be subject to routine cargo inspections. To qualify for that benefit, though, C-TPAT members will have to be certified and validated, adopt industry best practices for supply chain security, and use security devices such as the so-called Smart Box, a container that's equipped with a radio frequency identification (RFID) tag. C-TPAT is a voluntary program designed to safeguard the nation against terrorism. (For more news about C-TPAT, turn to Page 19; for commentary on the program, see "Parting Shot" on Page 88.)
• Make it FAST ... or else.Come May 1, Customs will require truck drivers who are transporting shipments under the Border Release Advance Screening and Selectivity (BRASS) program to have a Free and Secure Trade (FAST) identification card. BRASS is designed to speed up border crossings for motor carriers that handle repetitive shipments of pre-screened goods. After May 16, shipments could be denied entry into the United States if drivers don't have a FAST card. The identification requirement was set out in the Trade Act of 2002.
• Should we change the nation's supply chain security programs? Yes, says Rob Quartel, president of FreightDesk Technologies and a former Federal Maritime Commissioner. Speaking at the Coalition of New England Companies for Trade (CONECT) annual conference in Providence, R.I., Quartel offered a number of thought-provoking ideas. One suggestion: C-TPAT might work better as an ISO-administered quality standard. The government, the courts, and the insurance industry should reward, rather than penalize, companies that find security risks and report them. And shippers should use data they already have, such as purchase orders and vendors' business histories, to manage security risks. "If you truly believe there's a risk to your supply chain," he admonished the audience, "... then you should be doing more about it than the government mandates."
• The arrival of larger containerships could further strain the ability of West Coast ports to handle growing import volumes. That's the view of LM columnist Ray Bohman, writing in his "Ocean Shipping News Summary" newsletter. As more steamship lines debut containerships with capacities of 8,000 TEUs or more in the eastbound trans-Pacific trade, they're bound to encounter problems docking at American ports. Bohman notes that it could take ports up to three days to unload the giant vessels, and each ship will require from 100 to 140 acres of terminal working space. Once unloaded, the containers from a single ship would fill six double-stack trains. There's also some question as to whether there is a sufficient number of longshoremen—despite recent hirings—to work the big ships.
• Which carriers, 3PLs, and warehouses will be the "American Idols" of logistics? Your vote will determine the winners of our annual Quest for Quality awards. For the past 21 years, we've asked shippers to identify the companies that provide them with the highest levels of service. So be on the lookout for an e-mail with a gold Quest for Quality medallion asking for your help in rating your service providers. Award winners will be featured in our August issue.
• Making an "Xtreme" commitment to the customer... Saia Inc., the Duluth, Ga.-based multi-regional LTL carrier, will offer what it calls the "Xtreme Guarantee" to qualified customers beginning next month. The program guarantees that shipments will comply with Saia's six "Customer Service Indicators": on-time pickup, delivery by 5:00 p.m. based on scheduled transit times, damage-free delivery, claim resolution within 30 days, accurate invoicing, and proof of delivery within five minutes when requested. If the carrier fails to meet those parameters, the shipper will receive a refund or credit for all charges, including accessorial and fuel surcharges. To be eligible for the program, shippers must register and have pricing agreements under Saia's 5700 series tariff.
• Do you need more information about the legal issues shippers face every day? Then consider attending one of the seminars to be offered later this month by William Augello, a regular LM contributor and author of the text, Transportation, Logistics and the Law. Augello will offer the programs in Cherry Hill, N.J., on May 20 and in Newton, Mass., on May 26. To make a reservation, call 1-888-798-1530. Augello, by the way, is now offering a CD-ROM version of his textbook for $150, or $225 for both the book and the CD. To order, call 520-204-0873.
• One name to bind them all... CP Ships, the London-based shipping group, announced late last month that it would drop individual brand names for its seven regional carriers. By the end of this year, ANZDL, Canada Maritime, Cast, Contship Containerlines, Italia Line, Lykes Line, and TMM Lines will all operate under the name CP Ships. Schedules and trade lane coverage will not be affected, but the company will consolidate some administrative functions. Customers' desire to do business with a single entity across multiple trade lanes was behind the move, said Vice President, Commercial Alan Boylan at a press conference. Boylan also said CP Ships intends to maintain the regional "flavor" of each trade lane while providing more consistent service worldwide.
• Ohio State will offer a masters degree in business logistics engineering. The Fisher College of Business and the College of Engineering at Ohio State University are partnering on the degree, one of a few such programs in the United States. Students will be exposed to logistics, business management, and technical engineering curricula. The program will include courses in logistics management, warehouse design, information technology, and mathematical programming. The new program gets underway in the fall of 2005.
• Another new program also seeks to fill the technical education gap. The International Supply Chain Education Alliance (ISCEA) will work with American RFID Solutions to offer a certificate in radio frequency identification (RFID) applications. The five-day program, which awards the RFID Supply Chain Manager credential, will be hardware- and software-neutral. ISCEA has developed and administers a number of other supply chain and quality management certificate programs. American RFID Solutions assists companies in implementing RFID technology.
• Huck Finn could once again be speeding down the Mississippi River if Sen. Kit Bond has his way. The Missouri senator has sponsored a bill to spend $2.475 billion to modernize the locks on the upper Mississippi River. The money would be used to build seven new locks and make improvements to the existing dam system. Sen. Bond says those improvements are needed to enhance the capacity and efficiency of the river transportation system. Waterborne commerce on the Upper Mississippi River has more than tripled over the last 35 years.
• The Intermodal Association of North America is on the move. The trade organization for the intermodal transportation industry recently relocated its headquarters. The new mailing address is 11785 Beltsville Drive, Suite 1000, Calverton, MD 20705. Telephone (301-982-3400) and fax (301-982-4815) numbers remain the same.